Telecom Egypt (TE) has reported revenues of EGP 9.56bn in the fourth quarter (Q4) of 2020, significantly up from EGP 6.79bn in Q4 of 2019. It also showed a rise on the EGP 7.40bn reported in Q3 of 2020, reflecting a rise of 40.8% year-on-year (y-o-y) and 29.2% quarter-on-quarter (q-o-q). Retail revenues grew by 20.2% y-o-y contributing about 51.0% of total revenues, driven by a y-o-y increase of 37.2% in Home and Service revenues. Home and consumer data continued to drive growth during Q4 of 2020, +41.5% y-o-y and +5.4% q-o-q, fuelled by a growth of 20.5% y-o-y in Home and Consumer subscribers. This segment stood at 6.7 million subscribers, along with an increase of 21.7% y-o-y in Home and Consumer Data ARPUs to reach EGP 136.2 per month in Q4 of 2020. Pharos Research sees that during the second wave of the novel coronavirus (COVID-19) pandemic, TE has not seen a big jump in data traffic, however, the traffic created by the first wave was sustained. This is attributed to the fact that schools and offices are still either fully working from home or doing so on a rotational basis. Another factor driving the sustained demand is content, a new phenomenon in Egypt, where international players come into the Egyptian market with specifically dedicated content, similar to Netflix, OSN and Watch It. TE's retail revenue growth was fuelled as well by customer additions, where mobile customers recorded 7.34 million subscribers in Q4 of 2020 (43.1% y-o-y, 3.4% q-o-q). Meanwhile, Home and Consumer Voice subscribers grew to 8.6 million subscribers in Q4 of 2020 (+15.7% y-o-y, +8.7% q-o-q), and Home and Consumer ADSL subscribers reached 6.7 million subscribers in Q4 of 2020 (+20.5% y-o-y, +5.0% q-o-q). Wholesale revenues grew by 18.0% y-o-y, contributing 43% of total revenues, mainly driven by International Customers and Networks (IC&N) revenues. Revenues in this latter segment grew by 209% y-o-y and 383% q-o-q to reach EGP 2.56bn in Q4 of 2020, which was boosted by the EGP 1.9bn in cable project revenue related to the 2Africa cable. On an annual basis, TE recorded revenues of EGP 31.9bn, showing an increase of 23.7% y-o-y, which was driven by solid Home and Consumer revenue growth of 37.3% y-o-y. This took place along with a significant increase in International Customers and Networks (IC&N) revenues of 52.0% y-o-y, which were attributed to the recognition of 2Africa cable revenues. Investment income from Vodafone recorded EGP 2.21bn in 2020 (-22.1% y-o-y). The annual drop in investment income from Vodafone is attributed to a strong base effect in 2019, mainly on the recognition of EGP 450m from the sale of the VIS unit, as well as reversal of dispute related proceeds. Currently, TE is looking at expansion beyond the initial plans into communities, where urban communities are expanding beyond greater Cairo and Alexandria. It is dedicating expansion plans during 2021 to new cities that the government is looking at, similar to New Alamein, New Ismailia, and New Port Said, and which are likely to attract more customers in the future.
